The present invention relates generally to the field of financial transaction cards and more particularly to a method and system for managing a transaction card account.
Currently, transaction cardholders or cardmembers throughout the world use transaction card accounts on a daily basis, and the use of the transaction card is a part of the typical cardmember""s daily life. However, no one transaction card is right for every cardmember, and the core of the transaction card selection process is the cardmember""s choice of a transaction card payment plan. Typically, a transaction card payment plan that is good for a cardmember who always pays the monthly bill in full is not necessarily good for a cardmember who does not pay off the balance each month. Further, a cardmember""s circumstances with respect to paying the monthly bill may change over time. There is a present need for a transaction card account that enables, for example, the flexibility of a pay-in-full charge card which also offers revolving credit functionality or a revolving credit card that also offers pay-in-full charge card functionality.
It is a feature and advantage of the present invention to provide a method and system for managing a transaction card account that enables a dual function transaction card with the flexibility of revolving credit and pay-in-full transaction card functions.
It is another feature and advantage of the present invention to provide a method and system for managing a transaction card account that enables a transaction card that allows a cardmember to elect either a pay-in-full secondary function of the transaction card that has a revolving credit card primary function or a revolving credit card secondary function of the transaction card that has a pay-in-full charge card primary function.
To achieve the stated and other features, advantages and objects, the method and system of the present invention makes use, for example, of computer hardware and software in managing the dual function transaction card account. In an embodiment of the present invention, the dual function transaction card with primary and secondary transaction card functions is issued to a cardmember in connection with the account. In one aspect, the transaction card has a revolving credit card primary function and a pay-in-full charge card secondary function. In another aspect, the transaction card has a pay-in-full charge card primary function and a revolving credit card secondary function. The transaction card in the aspect with the revolving credit card primary function and the pay-in-full charge card secondary function allows the cardmember to revolve up to a predetermined credit limit balance and to pay in full a balance above the predetermined revolving credit limit balance and functions both as a pay-in-full charge card and a revolving credit card, if the cardmember chooses to pay a revolving credit card balance in full. The transaction card in the aspect with the pay-in-full charge card primary function and the revolving credit card secondary function allows the cardmember to revolve a portion of the pay-in-full charge card balance and functions both as a pay-in-full charge card and a revolving credit card, if the cardmember chooses to revolve any portion of the unpaid balance of the pay-in-full charge card balance.
The cardmember is allowed to incur charges on the account with the dual function transaction card, for example, for purchase transactions, as well as for cash advances. A charge incurred for a cash advance on the account for the dual function transaction card having the revolving credit card primary function and the pay-in-full charge card secondary function is treated as revolving credit with a finance charge assessed from the day of the advance until payment is received. A charge incurred for a cash advance on the account for the dual function transaction card having the pay-in-full charge card primary function and the revolving credit card secondary function is likewise treated as revolving credit with a finance charge assessed from the day of the advance until payment is received.
Periodically, a statement on the account is issued to the cardmember for a balance payable that is based on the primary function of the transaction card. The periodic statement based on the primary function of the transaction card as a revolving credit card informs the cardmember of a balance that can be revolved and a balance above a pre-defined revolving credit limit that must be paid in full, a minimum payment due and a revolving credit line amount, and provides the cardmember a predetermined number of grace days for payment of the statement. The periodic statement that is based on the primary function of the transaction card as a pay-in-full card informs the cardmember of a balance that is due in full; provides the cardmember a predetermined number of grace days for payment of the statement; provides a total balance including the charge and revolve functionality; and includes a minimum due for both of the following options: 1) the charge balance in full with a portion of the revolving balance; or 2) a portion of the total balance where the cardmember can elect to cause an unpaid portion of the charge balance to move into the revolve balance.
In an embodiment of the present invention, the cardmember is allowed to elect the secondary function of the dual function transaction card, which can be either the cardmember""s election of the pay-in-full charge card secondary function of a dual function transaction card having a revolving credit transaction card primary function or the election of the revolving credit transaction card secondary function of the dual function transaction card having a pay-in-full transaction card primary function. The cardmember elects the pay-in-full charge card secondary function of the transaction card in the aspect with the revolving credit card primary function by exceeding a revolving credit line assigned to the transaction card account or by balance consolidating (xe2x80x9cbalconningxe2x80x9d) an amount that exceeds a revolving credit line assigned to the transaction card account. A cardmember who exceeds the revolving credit line assigned to the transaction card account is required to pay-in-full the balance by which the revolving credit line is exceeded and any charge by the cardmember that exceeds the revolving credit line assigned to the transaction card account is either 1) approved; 2) reviewed for approval and the cardmember may be called to the phone at point of sale (POS); or 3) the purchase may be declined; the decision depends upon the dollar amount of the purchase, the cardmember""s credit history, the length of time the cardmember has been a cardmember, and other criteria as may be determined. The cardmember elects the revolving credit card secondary function of the transaction card in the aspect with the pay-in-full charge card primary function by choosing to make a partial payment of the pay-in-full balance due, by taking a cash advance, or by accepting a balance consolidation (xe2x80x9cbalconxe2x80x9d) onto the transaction card account. Upon election of the revolving credit card secondary function, a maximum amount is established that the cardmember is allowed to revolve (xe2x80x9crevolving credit limitxe2x80x9d), and the transaction card is allowed to function as a revolving credit card for balances which the cardmember chooses to revolve.
A new balance is computed on the account in response to the election of the secondary function by the cardmember. For the election of the pay-in-full charge card secondary function of the transaction card in the aspect with the revolving credit card primary function, a new total balance is computed, which consists of at least a cardmember-chosen revolving balance and a full transaction balance incurred by the cardmember as a result of continued usage of the transaction card. Further, a total minimum due is computed, which consists of at least a minimum due for the revolving balance and the full amount of the transaction balance. For the election of the revolving credit card secondary function of the transaction card in the aspect with the pay-in-full charge card primary function, a new total balance is computed that consists of at least a cardmember-chosen revolving balance and a full transaction balance incurred by the cardmember as a result of continued usage of the transaction card. In addition, a first minimum due option is computed that consists of at least a minimum due for the revolving balance and the full amount of the transaction balance. A second minimum due option is also computed that consists of at least a minimum due for the revolving balance and a minimum due for the transaction balance.
A key aspect of the credit card account for an embodiment of the present invention is the dual charge and revolve functionality in which, for example, the dual function transaction card is issued to a cardmember with a charge bucket function and a revolve bucket function in connection with the account. The cardmember is allowed to incur charges on the account with the transaction card which fall into the charge bucket for which no interest accrues. Periodically, a statement is issued to the cardmember on the account for a balance payable on the charges in the charge bucket, and if the balance on the charges in the charge bucket is not fully paid, any remaining unpaid balance falls from the charge bucket into the revolve bucket on which interest accrues.
In this aspect, as mentioned, the cardmember is issued the dual function transaction card with the charge bucket function and the revolve bucket function and allowed to incur new charges on the account by making purchases with the transaction card in a billing cycle which new charges fall into the charge bucket on which no interest accrues. A statement is issued to the cardmember on the account for the current billing cycle at the end of the billing cycle for a balance payable on the charges in the charge bucket, which are allowed to remain in the charge bucket on which no interest accrues, and the cardmember is allowed to continue using the card for new purchases in a succeeding billing cycle which also fall into the charge bucket on which no interest accrues.
At the end of each billing cycle, the cardmember is allowed to elect either a first minimum due option of paying off the charges in the charge bucket in full or a second minimum due option of payment of a predetermined fraction of the entire balance of the charges in the charge bucket. If the cardmember pays off the charges in the charge bucket in full according to the first minimum due option, all current charges made by the cardmember are allowed to remain in the charge bucket, and all charges for new purchases made in a second succeeding billing cycle also fall into the charge bucket on which no interest accrues, as well. If the cardmember pays the predetermined fraction of the entire balance of the charges in the charge bucket according to the second minimum due option, all of the unpaid charges for purchases for the billing cycle fall into the revolve bucket on which interest accrues.
Other features in this aspect include, for example, allowing the cardmember to elect, upon issuance of the dual function transaction card, an option for balance consolidation in which charges for all new purchases fall into the charge bucket on which no interest accrues. Further, the dual function transaction card can be issued to the cardmember with the charge bucket function having an associated no preset spending limit feature and the revolve bucket function having an associated revolving credit line. It is to be noted that the cardmember is also allowed to incur new charges on the account by using the transaction card for a cash advance at an ATM which fall immediately into the revolving bucket and begin to accrue interest, while continuing to incur charges for new purchases that fall into the charge bucket on which no interest accrues.
Additional objects, advantages and novel features of the invention will be set forth in part in the description which follows, and in part will become more apparent to those skilled in the art upon examination of the following, or may be learned by practice of the invention.